Two different subcellular sites and mechanisms have been proposed for the hepatic conversion of bilirubin monoglucuronide to bilirubin diglucuronide: a microsomal system requiring UDP-glucuronate and a UDP-glucuronate-independent transglucuronidation or dismutase reaction localized at the bile canalicular plasma membrane. To further define these, canalicular plasma membranes were highly purified from rat liver, and the capacity of these to form bilirubin diglucuronide was compared with that of simultaneously isolated hepatic microsomes. The canalicular liver plasma membranes were 48-116-fold enriched over homogenate in various canalicular marker enzyme activities; microsomal contamination was less than 10% based on the NADPH-cytochrome c reductase activity. No evidence of any conversion of highly purified bilirubin IX alpha monoglucuronide to bilirubin diglucuronide was found with canalicular liver plasma membranes either in the absence or presence of UDP-glucuronate. In contrast, digitonin-treated microsomes isolated under similar conditions converted 31% of added bilirubin monoglucuronide (9.4-17.1 microM) into bilirubin diglucuronide in 30 min, the reaction being dependent on UDP-glucuronate. When bilirubin (12.5 microM) was added to the microsomes, 42.3% was converted to bilirubin monoglucuronide and 40.9% to bilirubin diglucuronide in 30 min. These data establish that the endoplasmic reticulum and not the canalicular liver plasma membranes forms bilirubin diglucuronide from bilirubin monoglucuronide and that the reaction requires UDP-glucuronate.